Archive for December, 2014

2014. A Year in Review

Wednesday, December 31st, 2014

Average London 2014  MLS Condo Selling Price $182,884 on 1587 unit sales vs the average selling price of $178,031 on 1466 unit sales in 2013.  In 2014 there were 70 sales of new MLS listed condos ( many builders prefer to sell in-house) at an average selling price of $310,639.

1548 Richmond Street Condos and “Tipping Points”.

Wednesday, December 24th, 2014

P1150552A tipping point is “the critical point in an evolving situation that leads to an irreversible development”. Stock analysts of recent times being using this term when they write about the auto stock the “Ford Motor Company”. Is the five-year run up in price of this stock price about to end? The reasons for this being the case are near endless. There is  for example the ongoing situation of massive airbag recalls, the continuing  news of operational losses in Europe and the fluctuating market conditions in such countries as Africa, South America and Latin America, a potential slow down in the rate of growth of new vehicle sales in China, a nervous concern over the launch of the new and more costly F150 trucks, the companies persistently weak North American compact lineup, the ever strong competition from import models, the lack of interest in general in new cars from young people (a new generation burdened with student loans), the concern over extended consumer loan periods on past sales, a now higher ratio of less profitable fleet vehicle sales, the continuing failure of the Lincoln brand name in spite of increased advertising efforts, ongoing problems with many of their unpopular and overly designed voice activated control systems. The issues are near endless. All of this at a point in time of near record breaking North American vehicle sales. Others however may be thinking differently about this current Ford situation and continue to remain confidence in this companies future. That’s what makes the market.

When it comes to real estate few pundits write about “tipping points” in reference to what might be happening with our current level real estate prices. After all, it could be argued that with time everything will go up in value.P1200844

A few months back at Condo World we began to research the average selling prices of the condos in the complex at 1548 Richmond Street. It’s a great complex for student living just north of the university. Here is what we came up with. The average MLS selling price for the time period of Jan 1st, 2014 – July 1st 2014 was $321,300.

Then we went on to prepare the following remarks. In the five year period of Jan 1, 2009 to Dec 31 2013, 27 units in this complex sold using the services of the “MLS” system. The average selling time for a unit to sell was only 14 days. This statistic becomes even more impressive when one realizes that most offers to purchase of condos have in them a clause stating that they require ten days as a “conditional period” to obtain and review what is known as a “status certificate”.

We further noted that of the 27 sales over this five year period ending Dec. 31st 2013, 13 sales happened in the months of January and February, 7 happened in the months of March and April, 1 sale happened in the months of July and August and no sales happened in the month of December. What this illustrates is that historically, most of the sales activity in this complex tends to happen in the early part of the year.

Now back to our reference of “tipping points”.  Only two MLS sales happened this year, one being in Feb. and one in March. Five listings have expired unsold which is something we didn’t ever see  happening in the recent past, one in the month of Jan., one in Feb., and one in each month of April, July and September. Finally, as of Dec.24th 2014 five units remain active for sale in this small complex with the average time on the market being 88 days.

What now appears to be happening is a “tipping point”. Sales have not being forthcoming.Why is this? Well, as with our referencing of the Ford Motor Company stock the reasonings could be many and we do not have any special inside knowledge of why this is happening.. It might now have something to do with age/condition related concerns which only became apparent when an unusually large number of units all came to the market in a relatively short time period. While this situation could very well be a “tipping point” it also could be viewed as being just a little bump in the road. Only time will tell. All we can really say is that something now seems to be spoking potential new condo buyers considering this complex. We note that this is not a trend we see happening with other complexes in the immediate area. Hopefully for all, the start of 2015 calendar year and beyond will witness a reversal in this new situation.

from the desk of ….. Peter Daoust, Broker,Remax Advantage Realty Inc. Brokerage.  519-649-6000

* A 2015 and 2016 update. In the first 6 months of 2015, four units sold out in this complex at an average “MLS” selling price of $304,250.We note that is a tad off previous higher pricing levels. In the first six months of 2016 only one unit sold using the services of the “MLS” system.